Monday, July 07, 2008

Adam Smith

A few months ago he made it onto the twenty-pound note. Now, Adam Smith gets a statue in Edinburgh. It is ironic that this event coincides with recent government pronouncements that hold his big ideas in disrespect. Thus, Gordon Brown urges us to stop wasting food, because waste is contributing to price rises. As I see it, that's the whole point of these price rises: to stop us wasting food! We need the price rises in order to change our behaviour. A similar point holds regarding the Government's plans to ban the use of incandescent light bulbs in order to save energy (and thus, lower its cost.) It's topsy-turvy thinking. Price should be allowed to do its job.

Here's a more complex example that affects me professionally. This article attempts to explain why the Government is right to introduce the "full economic cost" regime for research grants. Essentially, the effect of this regime (by comparison with the previous one) is that when you get a grant, they pay you more money for doing the same amount of work. The rationale is that universities were trying too hard to attract under-funded research projects, which leads to infrastructure decline, and is supposed to be unsustainable. But, hang on a moment: if universities were already fighting like rats in a sack to get these insufficient research grants, why stop them? I'm not just a researcher, I'm also a taxpayer, and I like the idea of my money going further, even when it's being spent on research. And from a selfish academic perspective, if each research project only attracted half the money it ought to, it would presumably double my chances of getting one.

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